Support of several UHNW customer families (ultra-high-net-worth)
Due to the common practice of building their business around serving multiple clients, parallels are usually drawn between MFOs and traditional wealth management companies. However, the number of clients serving MFOs remains relatively small compared to traditional wealth management practices. 70 percent of those questioned in the Multi Family Office Review 2020 stated that they had looked after fewer than 100 customersI.
The associated costs for MFOs are shared among the families they serve. This enables MFOs to be more affordable compared to other family office structures. The benefits of the economies of scale offered by this model go beyond reducing costs. The combined purchasing power of families within an MFO can enable individual families to gain access to world-class investment opportunities that they may otherwise not have been able to access due to high minimum account requirements. Often times, the most elite investment strategies have individual investment minimums in excess of $ 50 million.
On-site team to support a wide range of services
Family Office Exchange, an industry-leading membership organization for family offices, lists, among other things, investment strategy and implementation, integrated financial strategies, client information management, asset transfer planning, fiduciary services, liability management, lifestyle improvement, family continuity / client education and family philanthropy on an expressly non-exhaustive list of family office Servicesii. Making a comprehensive list is not an easy task as these organizations strive to manage and oversee the day-to-day affairs of their customer families. These complex issues are as unique as the families these highly specialized organizations serve.
In addition to offering a comprehensive range of services, MFOs must have the expertise, resources and dynamism to expand the breadth and depth of their service offering in a bespoke manner and to support the concerns of their individual customer families. It is clear that it is not possible for a single provider to maintain this extensive range of services for multiple customers. A collaborative team of professionals working together is required to maintain an MFO.
By grouping families within a single organization, families gain access to skilled professionals of a particular caliber and the associated costs that may be unsustainable for a single family. Multi-family care also provides an opportunity to face a variety of situations based on the diverse circumstances of the clientele they serve. This, in turn, enables professionals to use this learning and the resulting expertise to the benefit of each of their customer families.